Supermarket giants Morrisons, Tesco and Asda set to cut diesel to under £1 for first time in 7 years

Three of the UK's biggest supermarket chains have dropped the price of diesel to below £1 for the first time since the financial crisisReuters

Three of the UK's largest supermarket chains Tesco, Asda and Morrisons will be selling diesel at less than £1 a litre for the first time since 2009. As of 4 January three of the UK's most popular supermarkets will be selling diesel at 99.7p per litre the lowest price since before the financial crisis.

Fuel Watch, which monitors the price of oil and its relation to forecourt prices for the RAC, has said that there has been too much disparity between the price paid at your local petrol garage and the dramatic dip in the price-per-barrel. But around 75%, of the cost of fuel at a petrol garage goes to the Treasury in duty and VAT.

The oil industry argues that once refinery costs, distribution and retailers' profits are factored in this leaves just a small percentage of profit for producing the commodity. The motorists body said that the price of diesel should have been cut earlier in line with that of petrol.

A spokesman said to the BBC: "Diesel drivers will clearly welcome this move by the big supermarkets, although it would be fair to say it is overdue.

"We hope that other supermarkets and the cheaper fuel retailers will follow suit and do the right thing for motorists. This should reduce the average price of diesel for motorists everywhere who will benefit from the low price of crude oil."

Peter Cattell, the fuel director for Tesco, which has 500 filling stations up-and-down the country, said: "Having diesel for 99.7p a litre will give our customers a big helping hand for the new year. This reduction will mean millions of customers save money by shopping at Tesco."